Borrowing and Lending Law in Nepal (2026): Civil Code 2074 + NRB
A 2026 practitioner's guide to borrowing and lending in Nepal under the Muluki Civil Code 2074 and the Nepal R...
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Tort law in Nepal is the body of law that gives a person who has suffered a civil wrong — a wrong other than a breach of contract or a crime — the right to claim compensation from the wrongdoer. For most of Nepal's legal history tort was treated as scattered judge-made doctrine read in from common-law principles, applied case by case at the District Court. That changed on 17 August 2018 (Bhadra 1, 2075 BS) when the Muluki Civil Code 2074 came into force and codified the law of torts in Chapter 17, Sections 672 to 684. Civil wrongs that previously had to be argued from first principles now have a statutory home. See Alpine's tort-law practice area for related matters.
This 2026 (2083 BS) practitioner's guide walks through tort law in Nepal as it now stands under the Civil Code 2074: what counts as a tort, the four recognised categories (intentional torts, negligence, strict liability and vicarious liability), the four elements of negligence as Nepali courts read them, how tort overlaps with crime where the same act is both a civil wrong and a criminal offence, the remedies the District Court can order (damages, injunction, declaratory relief), the limitation period within which a tort suit must be filed, common defences raised by defendants, and the practical procedure for taking a tort claim from notice through filing to judgment.
Quick answer — Tort law in Nepal (2026):
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A tort is a civil wrong — distinct from a breach of contract and distinct from a crime — that causes harm to another person and gives the harmed person a right to claim compensation. The classic shorthand is "civil wrong with unliquidated damages": civil because the State is not the prosecutor, the victim brings the claim themselves; unliquidated because the amount of compensation is determined by the court on the evidence, not fixed in advance by a contract or statute.
Under the Muluki Civil Code 2074, Chapter 17 (Sections 672 to 684) codifies tort liability in Nepal. Before the Code came into force on 17 August 2018, Nepali courts decided tort claims by reading in common-law principles through the Country Code (Muluki Ain) and judge-made jurisprudence. The Civil Code 2074 brought tort onto a single statutory footing — though as commentators have noted, the codified framework does not exhaustively define every element (the "duty of care" doctrine, for example, is read in by analogy rather than spelled out in the text), so common-law influence remains substantial in how courts apply the statute.
Chapter 17 of the Civil Code 2074 spans Sections 672 to 684 and lays down the general principles of tort law in Nepal. The provisions establish the right of any person to seek compensation for injury to person, property or reputation; describe the categories of liability (intentional, negligent, strict and vicarious); identify the kinds of harm for which a remedy is available; and set out the framework for remedies including damages, injunction and declaratory relief.
The Code does not repeat every common-law doctrine in detail. Concepts that practitioners would expect to find — duty of care, foreseeability, remoteness of damage, the "neighbour principle", contributory negligence in detail — are referenced in broad strokes and developed in court practice. The result is a statute that gives a clear hook for filing tort claims and a clear forum (the District Court) but still leaves room for courts to read in common-law principles when the facts of a case demand it.
Nepali tort law under the Civil Code 2074 recognises four broad categories of liability. Each category has its own ingredients and its own evidentiary path at trial.
Negligence is the workhorse of modern tort practice in Nepal. To establish a negligence claim at the District Court, the claimant must prove four elements, each on the balance of probabilities. The claim fails if any one element is absent.
The four-element structure is universal across negligence claims, but the evidence varies by context — police reports and medical records for road traffic claims, expert opinions and clinical records for medical negligence in Nepal, professional standards and case files for lawyer or accountant negligence, photographs and engineering reports for premises liability.
Defamation occupies a special position in Nepali tort law because it operates on two parallel tracks. As a tort under Civil Code 2074 Chapter 17, defamation gives the victim a civil claim for compensation at the District Court. As a separate matter under criminal and statutory law, defamation can also trigger criminal prosecution under the National Penal Code 2074 and special provisions in media-related statutes. The same statement — a false written or spoken accusation that lowers the claimant in the eyes of reasonable people — can ground both a tort claim and a criminal case on the same facts.
The tort claim focuses on the elements of defamation: a defamatory statement, published to a third party (i.e. communicated to someone other than the claimant), referring to the claimant, and causing actual or presumed damage to reputation. Defences include truth (justification), fair comment on a matter of public interest, qualified privilege (statements made in the discharge of a duty), and absolute privilege (parliamentary and judicial proceedings). The full Nepal defamation law overlay sits alongside the Civil Code tort head and counsel running a reputation case typically engages both.
Vicarious liability holds one person responsible for the tort of another because of a recognised relationship between them. The principal application in Nepal is employer for employee: where an employee commits a tort in the course of employment, the employer is jointly and severally liable along with the employee. The rationale is partly distributive (the employer is in a better position to bear the loss and insure against it) and partly behavioural (the employer's liability incentivises proper hiring, training and supervision).
The course-of-employment test is the key gateway. A delivery driver who runs over a pedestrian while making a scheduled delivery is acting in the course of employment, and the employer is liable. A delivery driver who deviates from the route to run a personal errand and causes an accident during the deviation may be on a "frolic of his own", taking him outside the course of employment for the duration of the deviation. The line is fact-sensitive and turns on the closeness of the connection between the wrongful act and the work the employee was engaged to do.
Beyond the employment relationship, vicarious liability extends to principal for agent (in agency relationships), partners for one another's acts in the partnership business, and parents for children's torts in limited statutory circumstances. The Civil Code 2074 references the principle in broad terms and courts apply it in line with common-law jurisprudence.
Strict liability is the no-fault head of tort. It applies where a person engages in an abnormally dangerous activity — handling explosives, storing or transporting hazardous chemicals, operating high-voltage electrical installations, keeping dangerous animals — and the activity causes harm. The claimant does not need to prove that the defendant was careless; the dangerous nature of the activity itself is the basis of liability.
The doctrine traces to the common-law rule in Rylands v Fletcher, which Nepali courts have applied through judge-made jurisprudence and which now sits comfortably within the Civil Code 2074 framework. Defences are narrow — typically Act of God (a natural event of extraordinary force), act of a stranger over whom the defendant had no control, statutory authority (where Parliament has expressly authorised the activity), and consent of the claimant. Contributory negligence is generally not a defence to strict liability but may reduce the damages.
The Civil Code 2074 gives the District Court three principal remedies in tort. The choice of remedy is driven by the nature of the harm and the claimant's strategic goal.
In some categories, restitutionary remedies are also available — return of property wrongfully taken (in conversion), or disgorgement of profits the defendant made from the wrong. The District Court can mould its order to fit the case, granting damages and an injunction together where both are warranted.
One act can be both a tort and a crime. A punch in a street fight is both the tort of battery (giving the victim a civil claim for compensation) and the criminal offence of assault under the National Penal Code 2074 (giving the State a prosecution case for punishment). A false published accusation can be both the tort of defamation and a criminal offence under media-related statutes. A driver who runs a red light and injures a pedestrian commits the tort of negligence and a criminal traffic offence.
The two proceedings operate on different tracks. The tort claim is filed by the victim, runs on the civil standard (balance of probabilities), and seeks compensation. The criminal case is filed by the State, runs on the criminal standard (beyond reasonable doubt), and seeks punishment. They can run in parallel on the same facts. Acquittal in the criminal case does not automatically defeat the tort claim — the lower civil standard may still be satisfied even where the criminal standard was not. Conversely, a criminal conviction is strong evidence in a subsequent tort claim though it is not strictly binding on the civil court.
Tort claims in Nepal are subject to a limitation period running from the date the cause of action arose — typically the date of the wrongful act or the date the harm was first manifested or reasonably discoverable. The general band is one to three years, with the precise period depending on the category of tort and the type of harm. Defamation claims tend to attract the shorter end of the band; personal-injury negligence claims typically sit higher. Where harm manifests later than the wrongful act (latent injury, delayed-discovery cases), the cause of action arises on the date the harm became discoverable with reasonable diligence.
The limitation period is jurisdictional — a claim filed out of time will be dismissed by the District Court regardless of merit. Counsel running a tort file diligence-checks the limitation position before any other strategic decision and, if time is tight, prioritises filing over further investigation. Interim relief such as injunctions can be applied for immediately upon filing without waiting for the full evidence to be assembled.
A tort suit in Nepal is filed at the District Court of the place where the tort occurred or where the defendant resides. The procedure tracks the general civil litigation framework: a written statement of claim setting out the facts, the legal basis (category of tort and the relevant Civil Code 2074 sections), the heads of damage being claimed, and the remedy sought; payment of court fees calculated on the value of the claim; service of summons on the defendant; written statement of defence; framing of issues; evidence (documents and witnesses); arguments; and judgment.
Evidence is the centre of gravity in tort litigation. Police reports, medical records, photographs of the scene and injuries, witness statements, expert reports (medical experts for personal injury, accident reconstruction experts for traffic claims, accounting experts for financial-loss quantification), and the claimant's own contemporaneous notes and correspondence all build the file. Where the tort overlaps with a criminal case, transcripts and judgments from the criminal proceedings are admissible in the tort case as evidence of fact.
Defendants in tort claims commonly run one or more of the following defences. Counsel preparing a claim should anticipate which defences will be raised and structure the evidence to defeat them.
Alpine Law Associates runs tort litigation across the full range of categories — personal injury from road traffic accidents, medical negligence claims, professional negligence against lawyers, accountants and engineers, defamation claims, employer-liability and vicarious-liability claims, nuisance and trespass disputes, and strict-liability claims arising from hazardous-activity harm. We advise on the merits of a prospective claim at the intake stage, secure the evidence early (medical records, police reports, expert opinions, scene photographs), and file at the District Court within the limitation window.
For defendants, we run the full defence — challenging the duty, breach, causation or damage elements; raising consent, contributory negligence, statutory authority or other defences with supporting evidence; and where appropriate negotiating a settlement that avoids the cost and reputational exposure of a contested trial. As a full-service law firm in Nepal, we coordinate tort claims with related criminal defence, insurance recovery, and contractual workstreams in a single counsel relationship — particularly important in cases like motor accidents and medical negligence where civil, criminal and insurance proceedings often run in parallel.
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Last reviewed: April 2026
Tort law in Nepal is the body of law that gives a person who has suffered a civil wrong (other than breach of contract or crime) the right to claim compensation from the wrongdoer. It is codified in the Muluki Civil Code 2074, Chapter 17, Sections 672 to 684, which has been in force since 17 August 2018. Tort covers harm to person, property and reputation through intentional acts, negligence, hazardous activities and the acts of employees.
The Muluki Civil Code 2074 (2017), Chapter 17, Sections 672 to 684 governs tort law in Nepal. The Code came into force on 17 August 2018 (Bhadra 1, 2075 BS) and codified tort liability on a single statutory footing. Common-law principles continue to inform how Nepali courts apply the statute, particularly on duty of care, foreseeability and remoteness.
The Civil Code 2074 recognises four broad categories of tort: intentional torts (assault, battery, false imprisonment, trespass, conversion, nuisance, defamation), negligence (failure to meet a reasonable standard of care), strict liability (no-fault liability for abnormally dangerous activities), and vicarious liability (one person's liability for another's tort through a recognised relationship such as employer-employee).
To establish negligence in Nepal, the claimant must prove four elements on the balance of probabilities: a duty of care owed by the defendant to the claimant; breach of that duty by conduct falling below the reasonable-person standard; causation linking the breach to the harm (the but-for test); and actual damages — physical injury, property loss, financial loss, reputation harm or recognised psychiatric injury. Failure to prove any one element defeats the claim.
Yes. Although the Civil Code 2074 does not expressly enumerate the duty of care test, Nepali courts read it in by analogy with common-law jurisprudence — the "neighbour principle" that you owe a duty to those whom you can reasonably foresee being affected by your conduct. Commentators have observed that the codified framework omits an explicit definition, leaving the courts to develop the doctrine case by case.
Vicarious liability is the liability of one person for the tort of another arising from a recognised relationship — most commonly employer for employee, but also principal for agent and partners for one another. The tort must have been committed in the course of the relationship (an employee acting within the scope of their employment, an agent acting within their authority). Both the wrongdoer and the responsible party are jointly and severally liable.
An employer is vicariously liable when the employee commits a tort in the course of employment — performing the tasks they were employed to do or acts closely connected to those tasks. A delivery driver who causes an accident during a scheduled delivery is in the course of employment. A driver who deviates from the route on a personal errand may be on a "frolic of his own" and outside the scope. The test is fact-sensitive.
Strict liability is no-fault liability — the defendant is liable for harm caused by an abnormally dangerous activity without the claimant having to prove carelessness. It applies to handling explosives, storing or transporting hazardous chemicals, operating high-voltage installations, and keeping dangerous animals. Defences are narrow: act of God, act of a stranger, statutory authority, and consent of the claimant.
Yes. A single act can give rise to both a tort claim and a criminal prosecution on the same facts. A punch is both the tort of battery (civil claim by the victim) and the offence of assault under the National Penal Code 2074 (prosecution by the State). The proceedings run on different standards — civil "balance of probabilities" versus criminal "beyond reasonable doubt" — and can proceed in parallel.
No. The criminal standard (beyond reasonable doubt) is higher than the civil standard (balance of probabilities), so acquittal does not automatically defeat a tort claim on the same facts. The District Court hearing the tort claim re-applies the civil standard to the evidence and may find liability even where the criminal court did not convict. A criminal conviction, by contrast, is strong evidence in a subsequent tort claim.
Defamation as a tort under Civil Code 2074 Chapter 17 gives the claimant a civil claim for compensation where a false statement, published to a third party, has lowered the claimant in the eyes of reasonable people. The elements are a defamatory statement, publication to a third party, reference to the claimant, and damage to reputation. Defences include truth, fair comment on a matter of public interest, and qualified or absolute privilege.
The Civil Code 2074 provides three principal remedies: monetary damages compensating the claimant for actual loss (medical bills, lost earnings, property damage, pain and suffering, reputation harm); injunction restraining ongoing or threatened wrongful conduct; and declaratory relief setting out the legal position between the parties. Restitutionary remedies (return of property in conversion, disgorgement of profits) are available in some categories.
Tort claims are subject to a limitation period running from the date the cause of action arose, generally in the band of one to three years depending on the category. Defamation tends to attract the shorter end; personal-injury negligence typically sits higher. Where harm manifests later than the wrongful act, the cause of action arises on the date the harm became reasonably discoverable. Suits filed out of time are dismissed regardless of merit.
Tort suits are filed at the District Court of the place where the tort occurred or where the defendant resides. The general civil-litigation procedure applies: written statement of claim, payment of court fees, service of summons, statement of defence, framing of issues, evidence, arguments and judgment. Appeals lie to the High Court and ultimately to the Supreme Court on questions of law.
Personal-injury tort claims rely on medical records (treatment notes, discharge summaries, prescriptions), expert medical opinions on causation and prognosis, police reports for accident cases, photographs of the scene and injuries, witness statements, bills and receipts for medical expenses, and evidence of lost earnings (employment records, accountant statements for self-employed claimants). Contemporaneous documentation is the strongest evidence.
Contributory negligence is the defence that the claimant's own negligence contributed to the harm — a pedestrian who stepped onto the road without looking, a passenger who refused to wear a seatbelt, a road user who ignored a clearly visible warning sign. Where established, it reduces the damages proportionately to the claimant's share of fault. It does not usually defeat the claim entirely, but can substantially reduce recovery.
Consent (volenti non fit injuria) is the defence that the claimant consented to the risk that caused the harm — a contact-sport injury suffered within the rules of the game, a surgical complication after informed consent, exposure to a clearly-warned hazardous activity. Consent must be informed (the claimant understood the risk) and freely given (not procured by pressure or fraud). It is a complete defence where established.
Yes. Medical negligence is a recognised category of negligence tort under Civil Code 2074. The four elements (duty, breach, causation, damages) apply, with the standard of care being that of a reasonably competent member of the medical profession. The claim may run in parallel with a complaint to the Nepal Medical Council and, where the negligence is gross, with a criminal case. Read the dedicated guide on medical negligence in Nepal for the full multi-track framework.
Tort is a civil wrong arising from a breach of a duty owed by law (a duty of care, a duty not to defame, a duty not to interfere with property). Breach of contract is a wrong arising from breach of a duty owed under an agreement between the parties. Tort duties are owed to the world at large; contractual duties are owed only to the other party to the contract. The same conduct can sometimes amount to both — concurrent claims are permitted.
Yes, subject to procedural requirements specific to suits against the State and its agencies. The Civil Code 2074 does not exempt government bodies from tort liability, but special notice requirements and forums may apply, and the statutory-authority defence is more readily available where the conduct in question was expressly authorised by law. Counsel running a claim against a public body diligence-checks the procedural framework before filing.
Nuisance is the tort of unreasonably interfering with another person's use and enjoyment of their land. Common examples are persistent noise, smoke, smells, vibrations, water seepage and obstruction of access. Private nuisance gives the affected landowner a claim for damages and an injunction; public nuisance is wider-ranging and may attract additional remedies. The interference must be substantial and unreasonable, judged by the standards of the locality and the duration of the disturbance.
Trespass to land is the unlawful entry onto or interference with land in the possession of another. It is actionable without proof of damage — entering someone's property without permission is itself the tort. Remedies include damages (substantial where there is real harm; nominal where the entry was minor) and injunction to prevent recurrence. Defences include consent, lawful authority (police search warrant), and necessity (urgent reasons such as preventing greater harm).
Nepali courts typically award compensatory damages reflecting actual loss rather than punitive damages. Where the defendant's conduct was malicious, oppressive or in flagrant disregard of the claimant's rights, the court may award aggravated damages reflecting the additional harm caused by the manner of the wrong. True punitive damages aimed solely at punishing the defendant are not a standard feature of Nepali tort practice.
Conversion is the tort of wrongfully taking, using or disposing of goods belonging to another, in a way that interferes with the owner's right to possess them. Examples include selling someone else's goods, refusing to return goods after demand, destroying or substantially altering goods. The remedy is the value of the goods at the date of conversion plus any consequential loss, or an order for return of the goods where they still exist and can be identified.
Yes. Alpine Law Associates handles tort claims across all categories — personal injury from road traffic accidents, medical negligence, professional negligence, defamation, employer and vicarious liability, nuisance and trespass disputes, and strict-liability claims arising from hazardous activities. We act for both claimants and defendants, secure evidence early, file within the limitation window, and coordinate parallel criminal and insurance proceedings where they arise. Speak with our lawyers today →
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This article is intended solely for informational purposes and should not be interpreted as legal advice, advertisement, solicitation, or personal communication from the firm or its members. Neither the firm nor its members assume any responsibility for actions taken based on the information contained herein.
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